Climate Change:12 steps that can help Governments to improve economic resilience

The need for climate change action has never been greater. Scientists caution that some catastrophic climate system ‘tipping points’ are already perilously close to being triggered at current levels of global warming. Governments and society must move quickly to reduce emissions and prepare for “baked in” effects of climate change. However, nations are still far from implementing climate policies at the required size and speed.

Climate change action does not occur in a vacuum, apart from other equally pressing global policy objectives. In addition to reducing emissions, climate policies must also be fair and equitable, politically viable, compatible with health, social, and fiscal policy, and in line with foreign policy considerations.. Above all, they need to avoid in the face any disruption inn future.

Facing the unknown: Climate policies must take potential disruptions into account.

This point has been driven home by recent events. The COVID-19 pandemic and Russia’s aggression against Ukraine have shown the opportunities for addressing climate change that a crisis can bring, including massive economic recovery spending and the ability to dramatically transform society in a short amount of time, as seen during COVID lock downs and through energy-saving behavior during the recent energy crisis. They also highlight issues relating to climate change, such as misplaced recovery expenditure, fossil fuel consumption that is set in stone, and the disruptive effects of geopolitical tensions.

The massive scope and rapidity of the change required to achieve net zero will have a significant impact on tax revenues, economic systems, and labour markets. These factors have the potential to undermine and even thwart the goals of climate policy if not addressed. The creation of climate legislation must also take into account anticipated future disruptions, such as the fast expanding use and capabilities of artificial intelligence.

climate change
climate change

12 key steps for better climate policies

    1. Make every effort to keep global warming to 1.5°C with no overshoot in light of the growing risk of approaching climate system tipping points. Faster reductions are necessary, and the pathway’s design counts. The most recent data indicate that we have already beyond the temperature threshold at which some potentially catastrophic effects are feasible. A difference is made by even the smallest increase in temperature.
    2. Ensure that spending on economic stimulus and crisis relief is targeted and properly aligned with climate goals. A chance to hasten climate action was provided by the enormous sums spent in recent years on crisis relief and economic recovery, but more could have been done. To take advantage of any climate-related possibilities that may arise from upcoming disruptions, we must improve.
    3. As much as feasible, “future-proof” net-zero climate policies by adopting strategic foresight and foreseeing transitional roadblocks. Some barriers are already obvious, like the cost of capital, the availability of essential materials, and the necessity for re- and up-skilling during the shift. Other bottlenecks and potential future disruptions can be teased out by foresight procedures, and proactive plans to deal with them can be developed.
    4. Adopt a systems-level approach to policy making as opposed to emphasising particular elements or results. Systemic resilience entails planning for potential shocks, including buffers to withstand initial effects, and making sure that funds are available to devote to recovery operations. Some changes can be permanent, necessitating ongoing adaptation to the new situation.
    5. Get the fundamentals of climate policy right, while also greening public governance and adjusting a combination of price-based and other instruments to regional, national, and local circumstances. Effective and context-appropriate climate policies are essential. There are numerous climate policy options available to governments, and they should employ each one. However, there are no silver bullets in this situation.
    6. Integrate climate change adaptation into all national policy making. Utilise overlaps between policy goals for adaptation and mitigation while minimizing trade-offs. It’s time to take mainstreaming adaptability into fundamental policy consideration seriously. Governments currently deal with rising expenses related to climate damage, and even if the most aggressive emission reduction goals are met, the effects of climate change will continue to worsen. Actions for climate reduction and adaptation should be combined in a way that concurrently advances both sets of policy goals, such as using natural solutions.
    7. Through rigorous fiscal planning, evaluating the direct and indirect consequences of policies, and using climate-aligned tax tools, address the public finance implications of the net-zero transition. Fossil fuel levies already in place bring in a sizable amount of money for the government. These will be lost as economic systems change if we reach net zero. The net-zero transition’s effects on public finances are modeled by the OECD and reveal a wide range of consequences across nations and time periods. Planning your finances carefully is crucial.
    8. Promote innovation through a goal- and result-based strategy. Measures of targeted funding for R&D and innovation at an early stage. To lower the cost of carbon reductions and to reach difficult-to-abate industries, innovation is crucial. In the current policy portfolios, deployment is prioritised over research and development.
    9. Analyses the distributional effects of climate policy, both direct and indirect. Inform the public about the operation of policies in a way that is understandable, accurate, and accessible. It’s crucial to control how climate policies affect people’s finances. Carbon pricing money can be recycled as one illustration of how to accomplish this to balance distributional impacts. Governments must eloquently explain not just why policies are required but also how they will be carried out and any potential effects they may have on households if they want to guarantee public support for the net-zero transition.
    10. Maintain acceptable labour market mobility and flexibility while fostering job quality and worker protection. Prioritise up- or re-skilling by identifying skills gaps and bottlenecks. Some employment will be lost as a result of the transition to net-zero, but new jobs will also be created. An efficient, just, and equitable transition depends on supporting people when they switch industries and making sure they have the necessary skills.
    11. Improved market practises, alignment of fundamental investment policies, use of tools for responsible business conduct, and leveraging the dual function of the insurance sector as an investor and an insurer are just a few of the ways the financial system’s policies can be better aligned with the goals of climate mitigation and adaptation. It will take a significant amount of investment to get to net zero. There will be plenty of economic opportunities, but the private sector and financial markets cannot rely on government investment to seize them.

    12 .Recognise how climate and development transitions are intertwined, utilising all available development cooperation levers to reach a “global approach” that harmonies development and climate goals. We must achieve worldwide net zero. The majority of future emissions will come from developing nations, who are also the ones most vulnerable to the effects of climate change. Their requirements and viewpoints must be taken into account equally.

     

But this is not a list you can mix and match. These actions must all be taken. Governments should seize this chance to priorities fostering economic and climatic resilience in the face of current and future global crises.

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